News round-up: London CIV delay, council expenditure, MMF reforms, LGPS allocations
0London CIV delays passive equity sub-funds
The London Collective Investment Vehicle has delayed plans to launch passive equity sub-funds due to issues converting life funds into new structures. In a summer update to fund members, it said: “Every effort has been made over the last six months to work with providers through a complex range of issues associated with converting life funds into structures that can be held in our Authorised Contractual Scheme. However, some of the issues, in particular the issue of value for money, are likely to take longer to resolve than we had hoped.”
Council net expenditure falls
Net current expenditure by local authorities was £27.1bn in the first quarter of the year, down 1.7% on the same quarter last year. The majority of this figure, released by the Department of Communities and Local Government, is attributed to downward changes to education expenditure as a result of schools converting to academies. A £126m rise in the health category compared to Q1 last year is due to additional public health responsibilities.
Analysis reveals spending cuts
Net current expenditure on housing services by local authorities has fallen 30% since 2010, according to a new analysis. The Press Association looked at the size of cuts to council services between 2010/11 and 2014/15. It also found that education services have been cut by 29% and highways and transport has suffered a 25% fall in spending.
MMF reforms ‘unlikely to lead to exodus’
Reforms to European money market fund regulations expected later this year are unlikely to lead to a flight from the instrument, according to Dennis Gepp, senior vice president, managing director and chief investment officer (cash) at Federated Investors UK. US investment in prime money market funds has fallen by about $338bn to July this year to $1.23trn, according to Securities and Exchange Commission data. But Gepp told website pionline.com that he was “certain” the money market fund reform and its effects will take a very different shape in Europe than in the US.
Northern Ireland LGPS appoints Unigestion
NILGOSC, the administrator of the Local Government Pension Scheme (LGPS) for Northern Ireland, has appointed Unigestion (UK) Ltd to manage a £300m low-volatility global equity mandate. The appointment has been made as part of a diversification strategy aimed at reducing downside risk. David Murphy, chief executive of NILGOSC, said: “Like most investors we are seeking steady returns in difficult times but we also need to reduce the risk of losses.”
Sheffield bids for housing cash
The Sheffield City Region Combined Authority is seeking a £4.7bn government grant to run its own housing programme. According to trade magazine Inside Housing, the authority, along with 12 housing associations, has made the bid under the government’s Shared Ownership and Affordable Homes Programme. The magazine reports that Greater Manchester is also understood to be in similar talks but is yet to submit a grant bid.
Strathclyde allocates £400m to private equity and real estate
An allocation of £400m has been made by Strathclyde Pension Fund to its private equity and real estate portfolios, managed by Partners Group. In addition, it has also agreed to increase by £30m an allocation to a Green Investment Bank fund, which targets the acquisition of equity stakes in offshore wind schemes.
